Franciscan Alliance to cut more than 900 jobs

Health care provider says reform prompted move

INDIANAPOLIS - Franciscan Alliance, which has 11 hospitals and health facilities in Indiana, announced Wednesday it will lay off 275 employees and will cut back another 650 positions.

The 275 layoffs represent 1.4 percent of its total workforce of about 20,000 employees, the company said.

Kevin Leahy, Franciscan Alliance president and CEO, cited "reforms associated with the Affordable Care Act" as one of the reasons for the cuts.

"The healthcare industry is changing rapidly, and economic pressures are forcing substantive changes in the field, including reduced reimbursements, new payer models, healthcare reform laws and shifts from inpatient to outpatient care," Franciscan Alliance said in a statement.

The company said it needs to cut costs of care delivery by 15 to 20 percent to stay afloat.

In addition to the cuts, remaining employees will have reduced benefits in 2014, including cuts to the retirement plan, elimination of a time off buyback program, increased health insurance costs and a salary freeze for management.

The cutbacks will include trimming employee hours and closing and not filling open positions.

Franciscan Alliance said it had already streamlined some of its processes and that layoffs were a difficult step.

"We are profoundly aware of the impact our decisions have on the lives of our co-workers and their families," Leahy said in a statement. "Those whose jobs will be affected by the workforce reduction will be provided with severance, extended health insurance where eligible and outplacement assistance."

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